Why ICSID rejected Pakistan bribe claim
Makes public its 425-page detailed order in Reko Diq case
Reko Diq, Balochistan. PHOTO: FILE
ISLAMABAD:
The International Centre for Settlement of Investment Disputes (ICSID) has rejected Pakistan’s allegation that former Balochistan chief minister Nawab Aslam Raisani was offered a bribe of US$1 million by Tethyan Copper Company (TCC) Company in connection with Reko Diq mines in 2009.
“The tribunal concludes that Respondent (Pakistan) has not established any of its individual allegations of corruption that would be attributable to Claimant.
“The Tribunal has found no proven incident of Claimant (TCC) exercising, or attempting to exercise, improper influence on government officials aimed at obtaining rights or benefits relating to Claimant’s investment in Pakistan,” says the ICSID 425-page judgment.
In 2015, Pakistan hired a new legal firm, Allen & Overy LLP to plead its charges of corruption against the TCC. In November 2017, the ICSID rejected Pakistan’s more than one dozen allegations of corruption in Reko Diq case. Last month, the court ordered an award of US$6 billion against Pakistan.
The TCC has already approached a US district court for the enforcement of the award against Pakistan. According to sources, the country's legal team will approach the international tribunal next month for annulment of the award. Reko Diq award is considered second largest in ICSID's history.
In its order, which has now been made public, the tribunal notes that it is not necessary to make a finding as to whether the chief minister’s allegation was prompted by political considerations “to play the audience” and, in particular, a desire to harm the TCC’s reputation in order to be able to pursue the Government of Balochistan’s (GOB) own project instead of continuing to cooperate with Claimant.
“It suffices to note that, as the Tribunal has found in its Decision on Jurisdiction and Liability, the GOB decided around December 2009, ie, the same time that the rumour regarding an alleged bribery offer by TCC surfaced, that it wanted to ‘take over’ the Reko Diq project from Claimant.
“The exact motive for Chief Minister Raisani raising the allegation of having been offered a bribe can be left open. In any event, the tribunal is not convinced Mr Mustikhan met with the CM in early December 2009 and offered him a bribe on the instruction of Claimant’s CEO Dr Jezek,” says the judgment.
The tribunal also discusses the stopovers made by government officials at the expense of the TCC or its parent companies on the way back from trips to Chile in December 2006 and Toronto in March 2007.
It says Pakistan failed to establish any causal link between the stopovers and any right or benefit that the TCC obtained or at least attempted to obtain in respect of its investment.
“Consequently, any improper conduct in connection with these stopovers cannot be deemed to have affected or ‘tainted’ the investment.
“In the absence of such any causal link between improper conduct and Claimant’s investment, the Tribunal also found that Claimant’s conduct cannot be deemed to amount to contributory fault or have any further impact on the quantum of its claim for damages under the Treaty,” it adds.
The tribunal also notes that the local expert group recommended in its briefing note of June 4, 2015, that the GOB should write to the National Accountability Bureau (NAB) as “to initiate an inquiry into corruption and corrupt practices in respect of Reko Diq. Responsible governmental officials and TCC personal should be brought to justice.”
In line with this recommendation, the GOB requested NAB to initiate an inquiry by letter of June 22, 2015, which NAB did by authorisation of its chairman two days later.
“Taking into account that NAB started to interview the seven individuals identified by the local group of experts as well as further individuals in July 2015 and obtained in the course of August and September 2015 so-called Section 161 statements from the individuals that Respondent (Pakistan) presented as witnesses in this arbitration in which each of them confessed to having been directly involved in corruption, it is indeed remarkable that as far as the tribunal has been informed, NAB has to date not initiated a prosecution against any of these individuals. The tribunal also feels the need to record its concern as regards the timing and context in which the evidence was produced,” says the verdict.
It notes that NAB did not allow for an inspection of the diary outside Pakistan and then refused Pakistan’s own expert LaPorte to perform the very analysis for which he had been retained, ie, an ink-dating analysis, which could have positively proven that two of the relevant entries in the diary were made in 2015 rather than in 2008 and thus that the evidence would have been fabricated.
The International Centre for Settlement of Investment Disputes (ICSID) has rejected Pakistan’s allegation that former Balochistan chief minister Nawab Aslam Raisani was offered a bribe of US$1 million by Tethyan Copper Company (TCC) Company in connection with Reko Diq mines in 2009.
“The tribunal concludes that Respondent (Pakistan) has not established any of its individual allegations of corruption that would be attributable to Claimant.
“The Tribunal has found no proven incident of Claimant (TCC) exercising, or attempting to exercise, improper influence on government officials aimed at obtaining rights or benefits relating to Claimant’s investment in Pakistan,” says the ICSID 425-page judgment.
In 2015, Pakistan hired a new legal firm, Allen & Overy LLP to plead its charges of corruption against the TCC. In November 2017, the ICSID rejected Pakistan’s more than one dozen allegations of corruption in Reko Diq case. Last month, the court ordered an award of US$6 billion against Pakistan.
The TCC has already approached a US district court for the enforcement of the award against Pakistan. According to sources, the country's legal team will approach the international tribunal next month for annulment of the award. Reko Diq award is considered second largest in ICSID's history.
In its order, which has now been made public, the tribunal notes that it is not necessary to make a finding as to whether the chief minister’s allegation was prompted by political considerations “to play the audience” and, in particular, a desire to harm the TCC’s reputation in order to be able to pursue the Government of Balochistan’s (GOB) own project instead of continuing to cooperate with Claimant.
“It suffices to note that, as the Tribunal has found in its Decision on Jurisdiction and Liability, the GOB decided around December 2009, ie, the same time that the rumour regarding an alleged bribery offer by TCC surfaced, that it wanted to ‘take over’ the Reko Diq project from Claimant.
“The exact motive for Chief Minister Raisani raising the allegation of having been offered a bribe can be left open. In any event, the tribunal is not convinced Mr Mustikhan met with the CM in early December 2009 and offered him a bribe on the instruction of Claimant’s CEO Dr Jezek,” says the judgment.
The tribunal also discusses the stopovers made by government officials at the expense of the TCC or its parent companies on the way back from trips to Chile in December 2006 and Toronto in March 2007.
It says Pakistan failed to establish any causal link between the stopovers and any right or benefit that the TCC obtained or at least attempted to obtain in respect of its investment.
“Consequently, any improper conduct in connection with these stopovers cannot be deemed to have affected or ‘tainted’ the investment.
“In the absence of such any causal link between improper conduct and Claimant’s investment, the Tribunal also found that Claimant’s conduct cannot be deemed to amount to contributory fault or have any further impact on the quantum of its claim for damages under the Treaty,” it adds.
The tribunal also notes that the local expert group recommended in its briefing note of June 4, 2015, that the GOB should write to the National Accountability Bureau (NAB) as “to initiate an inquiry into corruption and corrupt practices in respect of Reko Diq. Responsible governmental officials and TCC personal should be brought to justice.”
In line with this recommendation, the GOB requested NAB to initiate an inquiry by letter of June 22, 2015, which NAB did by authorisation of its chairman two days later.
“Taking into account that NAB started to interview the seven individuals identified by the local group of experts as well as further individuals in July 2015 and obtained in the course of August and September 2015 so-called Section 161 statements from the individuals that Respondent (Pakistan) presented as witnesses in this arbitration in which each of them confessed to having been directly involved in corruption, it is indeed remarkable that as far as the tribunal has been informed, NAB has to date not initiated a prosecution against any of these individuals. The tribunal also feels the need to record its concern as regards the timing and context in which the evidence was produced,” says the verdict.
It notes that NAB did not allow for an inspection of the diary outside Pakistan and then refused Pakistan’s own expert LaPorte to perform the very analysis for which he had been retained, ie, an ink-dating analysis, which could have positively proven that two of the relevant entries in the diary were made in 2015 rather than in 2008 and thus that the evidence would have been fabricated.